Heterogeneous Wealth Effects

Dimitris Christelis, Dimitris Georgarakos, Luigi Pistaferri and Maarten van Rooij
Authors registered in the RePEc Author Service: Tullio Jappelli ()

No 14453, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We measure wealth effects on consumption using a novel research design: responses to direct survey questions asking how much a household would change consumption in response to unexpected (positive and negative) shocks to own home value. The average wealth effect is in the 2-5% range, in line with econometric estimates that associate changes in housing wealth with consumption realizations. However, our analysis uncovers significant heterogeneity. Extensive margin responses are limited: more than 90% of the sample reports no consumption adjustment to wealth shocks. On the other hand, conditioning on adjusting, intensive margin responses are substantial. Finally, the consumption response to positive wealth shocks is greater than the response to negative shocks.

Keywords: Wealth effect; Housing; Heterogeneity (search for similar items in EconPapers)
JEL-codes: D12 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP14453 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Heterogeneous wealth effects (2021)
Working Paper: Heterogeneous Wealth Effects (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14453

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14453

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().